Will marijuana legalization eradicate the black market?

October 27, 2010

Supporters of Proposition 19 liken their cause to the lifting of prohibition on alcohol nearly 80 years ago. Making pot legal and regulating it like alcohol, they say, could raise millions in tax revenues and wipe out the black market, along with the social costs associated with it. [CaliforniaWatch]

But breaking the underground trade in marijuana might not be so easy.

Marijuana seizures are running at record levels in California, having more than tripled since 2005. But drug agents say they are getting only a fraction of the total crop. And in California’s saturated pot market, dealers big and small are moving the drug out of state in ever larger quantities, using everything from overnight delivery services to tractor-trailers.

“We’re seeing more and more of the marijuana cultivated in California being exported where there is a market that will pay more,” said Bill Ruzzamenti, a former special agent with the Drug Enforcement Administration who now heads a regional agency that monitors drug trafficking in California to California Watch.

Ruzzamenti says the pot cultivation boom in California began soon after voters legalized medical marijuana 14 years ago. Now, he believes, California could be a net exporter of the drug.

“Literally, we have had shipments of marijuana from California seized in all 50 states. And they’re going to where they can maximize their profits,” Ruzzamenti said to California Watch.

The surging demand for California-grown marijuana is good news for some growers and bad news for the drug war. But the trend could challenge a key goal of Proposition 19 – wiping out the illegal drug trade.

The effect on the black market

Former San Jose Police Chief Joe McNamara has drawn parallels to the repeal of alcohol prohibition.

“Al Capone and his bootleg gangsters were shooting up the streets not because they were drunk on booze. It was for the vast underworld profits. And once alcohol was legalized, it put them out of business as bootleggers. And that’s the goal of Prop 19 that would be achieved very quickly,” McNamara said to California Watch.

But opponents argue the black market will persist because the measure will not change federal law or statutes in other states.

“There are millions of plants being grown illegally,” said George Mull, who heads the California Cannabis Association, a medical marijuana group that opposes Proposition 19 to California Watch. “A lot of it is being sent out of the state. There’s no way to think that if Prop 19 passes, those same people are going to register their (marijuana) grows and then keep all of their plants here in California.”

Mull says even if Proposition 19 passes, the black market will continue, because prices will stay higher in other states where pot remains illegal, leaving in place a premium for smugglers.

Some California law enforcement officials worry that the black market could grow even stronger, with criminal gangs using legalization as a cover for massive smuggling operations.

But former Police Chief McNamara says similar arguments were made against the lifting of alcohol prohibition and they proved wrong. He says marijuana is no different.

“Commercial growers would be regulated,” he said to California Watch. “They would be controlled. They would be subject to law enforcement. And if they were illegally exporting the drug, that would be against California law as well.”

McNamara says he hopes the push for legalization will spread across the country, making it easier to enforce state regulations. California voters will decide for themselves on Nov. 2.

16 Comments

From the No on 19 websiteOn average, a drunk driver kills someone every 45 minutes. Recreational marijuana use in fatal crashes will increase if Prop. 19 passes. It will be legal for a driver to get high right before taking the wheel. It will also be legal for passengers to smoke pot as they drive on the freeway or in your neighborhood.

So I have to ask ; What if all involved are killed; Who is left to light up? I have a problem with the sequencing here.
I mean with LSD people can have premonitions so maybe there will be some cause and effect.
I think this clip will make the point as to the natural sequence of events.

It might be interesting to see California with all its might and glory, go head to head against the Federal Government on this one. California could boycott all ag exports to federal agencies and the feds would be crippled.
But it needn’t come to that. The truth is, most Americans want to see what happens if California legalizes pot. Everyone is curious. California and being stoned on pot goes together in people’s minds from coast to coast. The greatest memories of so many straight and narrow company men east coasters are the times they came out to Cali when they were college age and went to come music festival or the beach or the Sierras and got really high on some pot they got turned onto.
The world WANTS, in fact expects, Californians to be using pot. They secretly want to believe there is some place in the world where people can run wild and free and get stoned if they want to. Of course that’s a myth. We’re not that much different than a lot of other places. But if Prop 19 passess….

I think booze already IS regulated even more to the degree proposed for weed by prop 19. You can’t:
* you can’t provide it to people under the age of 21
* if people under age 21 consume it at your party, you can get massive fines
* You can’t transport it in an unsealed container in your car
* You can’t have an open container of it in public
* You can’t produce your own for sale without a license
* You can’t purchase it after midnight
* Many police officers are trained and equipped to check your level of alcohol consumption
* There are random checkpoints to determine if you have consumed any while driving
* There are huge fines and loss of license penalties for most alcohol violations

I don’t think prop 19 proposes that many restrictions on weed. What other regulations on booze do you propose?

Funny how there are some cop groups for Prop 19, and then you have some stoner groups (like “Stoners against Prop 19”) that have come out strongly against it (because prop 19 limits the amount you can possess, process, share or transport to just one ounce and limits grow areas to a single 25-square-foot area.)

Honestly, I don’t think this is going to be the huge tax windfall most of the supporters are claiming it will be. Most dealers are not going to want to register and pay taxes on something they have been selling tax free for decades. The underground market to allow them to evade any kind of government regulation is already well established.

Some of the reasons stoners are voting no on prop 19 (taken from stop19 . com)

How will Prop 19 affect you?

• Are you age 18-20? You will not be allowed to consume cannabis legally under Prop 19. Currently, all you need is a medical recommendation to do so.

• Do you interact with anyone under age of 21? You will be looking at up to 6 months in jail for passing them a joint. (If the person is under 18 you will be looking at up to 7 years in prison.)

• Do you live in the same “space” and a minor? (Space could mean anything from the same house to an entire apartment complex.) You will not be allowed to consume cannabis.

• Do you rent your home? Prop 19 will only allow you to grow cannabis if you have permission from your landlord. Due to the risks involved, many (if not most) California landlords do not allow it. How is this legalization?

• Do you grow cannabis with a doctor recommendation? Prop 19 will likely be interpreted by law enforcement and judges to limit your grow space to 5′x5′.

• Do you provide your extra medical cannabis to dispensaries? It will be a crime to do so if Prop 19 passes. In addition, large Oakland growers and tobacco companies will take control of the market and push you out.

• Do you currently have to use your medical cannabis anywhere but home? Prop 19 will prevent patients from using their medicine anywhere in pubic. Which for many people with illnesses is not always possible.

• Do you sell your extra medical cannabis to other medical patients? Prop 19 will make this practice illegal. Even if you are only selling it to cover your growing cost.

• Do you currently enjoy the use of cannabis free from Government interference? Not only will the Government impose excessive taxes under Prop 19, but the federal government will likely respond with unprecedented action against California cannabis users. “The federal Controlled Substances Act makes it a felony to grow or sell cannabis. California can repeal its own marijuana laws, leaving enforcement to the feds. But it can’t legalize a federal felony. Therefore, any grower or seller paying California taxes on marijuana sales or filing pot-related California regulatory paperwork would be confessing, in writing, to multiple federal crimes.”

All those “FACTS” you posted above from some anti-Prop 19 group are not facts at all. This is blatant, inaccurate propaganda that you’ve fallen for and are not trying to infect CalCoastNews readers with.

Try READING the proposition. If you’re going to cut and paste, PASTE THE DAMN PROPOSITION, not a bunch of absolute LIES aimed at deceiving voters.

Actually, some growers most likely do claim pot sales (marked as “agriculture”) on tax filing. Now that dispensaries are buying pot by the bulkload ($2,000 to $4000 a pound), the accounting can be very up front.
Pot growers would be wise to not run afoul of the tax laws. The wisest ones take that into account and likely save their receipts from their dispensary sales. No big deal.

The federal gov’t will continue to arrest people if 19 passes. How do the idiot sponsors of this bill think the pot will be distributed without federal intervention? Just watch, there will be hundreds of Charles Lynch’s arrested because of the feds. Until at least medical marijuana is accepted nationwide, full legalization is a pipe dream. Enjoy what we have, ie.prop 215. Big bad federal gov’t may just go back to the old days with this one also if they get a little pissed.

Dude, we OWN the federal government! And it might be interesting to see California with all its might and glory, go head to head against the Federal Government on this one. California could boycott all ag exports to federal agencies and the feds would be crippled.

But it needn’t come to that. The truth is, most Americans want to see what happens if California legalizes pot. Everyone is curious. California and being stoned on pot goes together in people’s minds from coast to coast. The greatest memories of so many straight and narrow company men east coasters are the times they came out to Cali when they were college age and went to come music festival or the beach or the Sierras and got really high on some pot they got turned onto.

The world WANTS, in fact expects, Californians to be using pot. They secretly want to believe there is some place in the world where people can run wild and free and get stoned if they want to. Of course that’s a myth. We’re not that much different than a lot of other places. But if Prop 19 passess….